Final answer:
Functional obsolescence relates to a decrease in property value due to outdated design, different from planned obsolescence where products are designed to become outdated quickly.
Step-by-step explanation:
When discussing Burt's investment experiencing functional obsolescence, it's important to differentiate it from planned obsolescence, yet also acknowledge their conceptual overlap. Functional obsolescence refers to a reduction in a property's value due to outdated design features that are no longer desirable, such as an unconventional floor plan. In contrast, planned obsolescence is a strategic decision by manufacturers to design products with a limited useful life or that become outdated quickly, encouraging consumers to purchase new products sooner than they would otherwise need to. This practice is not strictly confined to technology; for example, the garment industry has been criticised for not investing in rip-proof fabric for nylon stockings, ensuring consumers need to continually replace them.
Planned obsolescence can sometimes seem like a natural outcome of technological advancements. However, it can be problematic, leading to increased waste and environmental issues, as well as financial impacts on consumers. If companies focused on designing products that last longer or can be easily repaired or upgraded, it would contribute to a more sustainable economy and value craftsmanship and quality.
One notorious example within modern economics is the technology industry, where mobile phones, laptops, and appliances are often designed to fail after a certain period, or become less functional due to software updates, thereby prompting consumers to replace them. The concept of planned obsolescence ties into discussions about sustainability and consumerism, highlighting the tension between economic growth and environmental responsibility.